Navigating Retail's New Frontier: Store Closures, Personalization, and Evolving Consumer Habits

For many retailers, including Big Lots, store closures and restructuring are not just unfortunate outcomes but necessary strategies to maintain profitability and relevance.

Store closures are often part of a broader strategy to realign resources and focus on more profitable locations. Retailers can identify underperforming locations and strategically close them to optimize their footprint by analyzing data on store performance, customer demographics, and market trends.

Customer potential is an increasingly important factor in location optimization. Before retailers decide to restructure or close stores, they need to measure the customer potential at each of their storefronts. This process helps brands identify their unique customer personas, determine their likelihood of making a purchase, and understand how far they’re willing to travel to each store.

Restructuring efforts often include streamlining operations, enhancing supply chain efficiency, and rethinking the in-store experience to attract modern consumers. Big Lots, for instance, has embraced a strategy that combines cost-cutting measures with investments in digital transformation, ensuring that the company's physical and online presences are both strong.

Omnichannel excellence is a rising concern for today’s retailers and customer analytics are key to meeting and exceeding customer needs, wherever they buy.

Personalization at Scale

Data is a powerful tool for retailers looking to provide personalized experiences to customers. As consumer expectations rise, personalization has moved from being a competitive advantage to a necessity. A study by McKinsey found that 71 percent of consumers expect companies to deliver personalized interactions, and 76 percent get frustrated when this doesn't happen.

Retailers can use customer analytics to understand behavior, preferences and purchase history, allowing them to tailor the shopping experience both online and offline. For example, by leveraging customer data, Big Lots can offer personalized promotions and recommendations, enhancing the shopping experience and fostering customer loyalty.

Personalization at scale requires sophisticated algorithms and machine learning models that can analyze vast amounts of data in real time. Retailers can deploy artificial intelligence-driven solutions to segment customers based on their behavior and preferences. These customer personas are essential for creating personalized marketing campaigns that resonate with individual shoppers.

Evolving Consumer Shopping Habits

Consumer shopping habits have evolved dramatically over the past decade. Retailers must stay agile and adapt to these shifts to remain relevant.

The shift towards e-commerce and mobile shopping has been one of the most significant changes in consumer behavior. According to a report by eMarketer, global e-commerce sales are projected to reach $5.9 trillion by 2024, highlighting the importance of a robust online presence for retailers.

In addition to online shopping, consumers are increasingly seeking convenience, sustainability and value in their purchases. Retailers like Big Lots have responded by offering flexible delivery options, sustainable product lines, and competitive pricing to meet these demands.

Moreover, the rise of social commerce, where consumers discover and purchase products directly through social media platforms, presents new opportunities for retailers to engage with younger audiences. By integrating social media strategies into their marketing efforts, retailers can tap into new customer segments and drive sales through platforms like Instagram, TikTok, and Facebook.

Conclusion

As the retail landscape continues to evolve, companies like Big Lots must navigate challenges and embrace opportunities to thrive. By strategically managing store closures and restructuring efforts, leveraging data for personalized customer experiences, and adapting to changing consumer habits, retailers can position themselves for success in an ever-changing market.

The key to success lies in understanding the unique needs of customers and using data-driven insights to deliver value at every touchpoint. As retailers continue to innovate and adapt, those that prioritize personalization, convenience and sustainability will be best positioned to capture the hearts and wallets of today's consumers.

Jim Swift is the CEO of Buxton, a consumer analytics company offering data to retailers to help them better understand their customers.